Is the 52-Week Money Challenge a Good Way to Save?
We all know we need to save money. You need to have three to six months of living expenses in your emergency fund. You should make saving for retirement a priority. And what about that nest egg?
For many, getting started is the hardest part. Enter the 52-Week Money Challenge, a savings method that promises you nearly $1,500 saved at the end of the year by putting away just dollars a week.
What Is the 52-Week Money Challenge?
Here’s how it works: You start off by saving just $1 the first week of the challenge, popping it into a jar on your counter without a second thought. The next week, you put away $2, and the next, $3, you get the idea. By the end of the challenge, you are saving more than $50 a week, bringing your total amount saved to just under $1,400 at the end of the year.
Not too shabby, right? If you’re wondering whether the 52-Week Money Challenge is right for you, read on for our honest assessment of this savings method.
The Potential Downsides
It’s fairly easy for anyone to set aside just $1 a week, especially with a visual reminder such as a jar full of money sitting on your countertop. There are also an abundance of downloadable charts available online, so you can manually track your progress as you watch your savings grow.
But toward the end of the challenge is when it gets tricky. Socking away $50 a week in December may be tough, especially when you consider holiday spending, like gifts, travel, office gift exchanges, and holiday meals.
Some experts suggest taking on the 52-Week Money Challenge in reverse: putting away $52 in week 1, $51 in week 2, and so forth. That way, you’ll end up just needing to save just a few bucks a week during those expensive holiday months.
Additionally, since $1 a week, $2 a week, $3 a week, etc. is such a nominal amount, it can be difficult to actually remember to set aside that money each week with everything else you have going on. Another potential challenge? Refusing the urge to raid your stash to tip the pizza guy or buy a coffee on the way to work. After all, it’s right there.
For some, it might be easier to commit to a set amount to save per month, put into their savings account, mutual fund, or CD (depending on your needs and preferences for that money) at the beginning of the month, and forgetting about it. This way, your money will actually be working for you, (i.e., earning interest), not just sitting in a jar, not earning a cent of interest. Ironically, if the 52-Week Money Challenge has taught us anything, it’s that every little bit matters.
Yet there is some wisdom behind this savings method. For one, you’re gaining momentum. And for anyone working toward a financial goal, whether it be saving to buy a home, pay off debt, or going on that dream vacation, momentum can make or break your success.
Some may argue that it’s simply easier to set aside a set amount per month. For example, to reach the same savings goal of $1,378 as you would with the 52-Week Money Challenge, you’d have to save roughly $114 a month. But it might be a bit trickier to find that money at the end of the month, rather than as you go along. Think about it: You’ve paid your monthly bills, satisfied any debt payments, doled out your monthly living expenses, covered an unexpected emergency. Do you really have $114 left to set aside?
Suddenly, a few bucks a week seems much more doable than over $100 at the end of the month when cash is tight.
While the 52-Week Money Challenge may not work for everyone (and may not even be the best financial choice, considering your money is just sitting in a jar, not earning interest), we can all agree on one thing: Saving money is good. Getting started is half the battle. And sticking to a savings plan will set you on the path to financial success.
For those looking to pad their emergency fund or just get started saving, the 52-Week Money Challenge may be a great option. After all, those visual reminders can be powerful saving cues. But it’s not the only option, and you should do your research when embarking on a savings plan, to ensure you pick the plan that works best for you.
More Money-Saving Tips:
- Determine how much you should actually be saving with these four guidelines.
- The single most powerful tool for saving money is to pay yourself first.
- Need the inspiration to stop spending and start saving? Remember that $1 today is worth more than $1 a year from now.
- In order to successfully save money, you really can’t avoid getting—and staying—on a budget.